Now that Groupon has dumped CEO Andrew Mason, the flaws in the business model are back under the microscope. And Mason's resignation letter and the money made by its founders have inspired questions and an angry video rant saying the one-time fastest-growing company completely screwed small businesses.

As other daily deals companies jumped into the space, the market became overcrowded, the deals redundant, and merchants grew frustrated once they realized offering a deal didn't necessarily help business.

And here's some irony: Mason, who received $378 in severance, saw the value of his 7.1 percent stake in Groupon go up by $34 million in the days since he got fired, and stock prices rose. His shares were worth about $228 million yesterday. He made $31 million in private transactions prior to Groupon’s 2011 initial public offering, and according to Securities and Exchange Commission documents, Eric Lefkofsky (now co-CEO) sold off a $382 million chunk of Groupon pre-IPO and Bradley Keywell, the third largest individual shareholder sold $133 worth while the company was still private, all in the form of dividend payments and stock sales amid bustling pre-IPO demand. After the company went public and the stock sank fast, all three had vowed not to sell his shares, but given what they’ve extracted already, maybe they don’t need to.

Those payouts and the exiting CEO’s letter to employees angered Loren Feldman of 1938Media who released a video rant (below) against Groupon and its leadership that's making the rounds on Twitter today, saying that its founder made millions and that they screwed small businesses.

After getting an MA in journalism from Syracuse University, Teresa worked as a general assignment newspaper reporter—general on purpose because besides the usual city hall and police articles, there was the chance to fly an F-18 with the Blue Angels and tag along with bounty hunters on a stakeout—all good preparation for covering entrepreneurs.

SHARE THIS STORY

Comments

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.